Business Directories

Tourism industry emerges from downturn

Berlin, March 7, 2014

The outlook for the global travel industry looks brighter for 2014 as European economic recovery and rising consumer confidence are prompting holidaymakers and businesses to loosen their purse strings again.

Growth is still unevenly spread across regions, according to comments from the industry's biggest trade fair in Berlin this week, with some destinations such as Egypt, China and Thailand facing a tough time due to political turmoil, security concerns or stricter regulations.

Current tension between Russia and Ukraine also poses a risk to growth this year but overall, the number of international tourists is set to increase by 4 to 4.5 percent after reaching a record of almost 1.1 billion in 2013, the United Nations World Tourism Organisation (UNWTO) said.

"We think that this (growth) will be consolidated again in 2014, 2015 and 2016 and beyond," Taleb Rifai, secretary general of the UNWTO told Reuters. "It will not be 5 percent every year, but the important thing is that growth is consolidated."

The International Air Transport Association (IATA) said on Wednesday that 2014 had got off to a strong start, with travel demand accelerating from last year thanks to stronger growth in advanced economies and emerging market regions.

Angela Brav, head of hotelier InterContinental's European business, said she started seeing a real uptick in the fourth quarter of 2013 and that has continued: "GDP is forecast to improve, unemployment is getting better and business optimism in Europe is high," she said at the ITB travel fair.

Paulo Salvador, chief marketing officer of World Hotels, which groups together almost 500 hotels in 65 countries, said the year had started off especially well in North America and Brazil, while growth was slower in Asia.

BOOM IN GREECE

Holidaymakers are spending more on their vacations, going for higher-quality or more frequent trips abroad.

Some destinations are benefiting from a weakening of their currencies, which have made travel to the Caribbean or Dubai cheaper for tourists from Europe.

London-listed tour operator TUI Travel said last month bookings so far this year had been especially pleasing from Germany and Britain.

Greece was in demand and travel firms TUI, Alltours and DER Touristik reported a double-digit jump in German bookings for the coming summer travel season.

Tourism is the biggest earner for Greece, accounting for about 17 percent of its output and 20 percent of employment.

The government has said it expects the number of visitors to its country to jump to 17 million this year after slipping 5.5 percent to 15.5 million in 2013.

Some tour operators said Greece and Spain's Canary Islands were benefiting from the uncertain situation in Egypt, where the recent bombing of a coach carrying Korean holidaymakers across Egypt's Sinai peninsula fanned security concerns and prompted some countries, including Germany, to advise their citizens not to travel to the area.

Egyptian tourism minister Hisham Zaazou told Reuters at the ITB that security concerns could dent holiday bookings for the Easter holiday season, a "prime time" for the country's tourism sector, which provides a livelihood for millions and the government with much-needed foreign currency.

The flare-up of violence comes as North African countries like Egypt and Tunisia still struggle to regain the trust of holidaymakers scared off by the Arab Spring uprisings that swept the region in 2011.

But while arrivals to Egypt as a whole were still 35 percent below the 2010 level last year, not all areas seem affected by the latest crisis.

Red Sea resort Soma Bay, across the Gulf from the Sinai peninsula, is offering perks like free upgrades or extra rounds of golf but has not had to grant massive discounts to bring in guests, marketing director Mohamed Fawzy said.

"Easter bookings are at about 75 percent right now, which is normal," he said.

Asian destinations also appeared to be having a tougher time bringing in tourists. German tour operators such as DER Touristik reported that bookings for Thailand, where protests have rocked the capital city of Bangkok, were also sluggish.

"The situation in Bangkok is really impacting the number of travellers," Holger Taubmann, Senior Vice President Distribution at Amadeus IT Group, told Reuters.

The number of visitors travelling to China slipped by 3.5 percent in 2013, which one tour operator said was related to pollution becoming a major concern for travellers.

At the same time, the Chinese surpassed the Germans as the top spenders on international travel in 2012 and preliminary figures point to a further 28 percent rise in spending by the Chinese in the first three months of 2013. – Reuters